Hamptons Average Home Price Jumps on $5 Million Sales

The average home price in New York’s Hamptons, the beachside retreat for financiers and celebrities, jumped 20 percent in the fourth quarter, lifted by a surge in sales of properties priced at $5 million or higher.

Hamptons homes sold for an average of $1.9 million in the quarter, compared with $1.59 million a year earlier, New York- based appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today. The median price fell 2 percent to $900,000, reflecting deals across the spectrum, said Jonathan Miller, president of Miller Samuel.

“The mix is returning to a normal distribution of sales,” Miller said in an interview. “On the upper end, the activity is more robust relative to the lethargic level of activity over the last couple of years.”

Luxury demand is returning as New York City employment rebounds and buyers take advantage of Hamptons prices that fell as much as 35 percent from their peak. There were 38 home sales of at least $5 million, the top 7 percent of the market, in the Hamptons and the North Fork of Long Island in the fourth quarter, the highest in three years of records at Miller Samuel and Prudential. A year earlier, there were 24 such transactions.

New York City’s jobless rate fell to 8.9 percent last month, the lowest level since April 2009, the state Labor Department said Jan. 20. Financial firms, whose employees’ bonuses drive the Hamptons market, added 6,500 jobs last year. About 56 percent of Wall Street finance professionals in a survey said they received a bigger bonus in 2010 than a year earlier, the job-search website eFinancialCareers.com found in a tally of 1,009 people this month.

“People at the high end, they felt that prices weren’t going to drop much more,” Dottie Herman, president of Prudential Douglas Elliman, said in an interview. “They went after the trophy properties and they got them at a discount from what they would have gotten four years ago.”

The median sales price of luxury properties in both the Hamptons and the North Fork, defined as the top 10 percent by price, climbed 44 percent in the fourth quarter to $6.5 million, according to Miller Samuel and Prudential. Sellers of luxury properties pared an average 14 percent off their asking price in order to strike a deal, down from 17 percent a year earlier.

“The properties that are selling are those that were discounted over the prior two years,” said Rick Hoffman, regional senior vice president for Long Island’s East End at New York’s Corcoran Group brokerage.

Sales of vacant land in the Hamptons nearly tripled in the quarter, with the dollar volume of land deals surging to $285 million from $99.3 million a year ago, according to Corcoran.

Date: 28 January 2011 | For the full report, please visit http://www.bloomberg.com

Hong Kong Is World’s Most Expensive Place to Buy Home on Property Shortage

Hong Kong is the world’s most expensive place to buy a home because of a shortage of properties on the market, according to a study of the top four cities by Savills Plc.

Hong Kong is 55 percent more expensive than London, based on an index published today by the property broker that compares the U.K. capital with the other cities. Moscow is 7.4 percent more expensive than London and New York is 15 percent cheaper.

Home prices in Hong Kong have been driven higher by record- low borrowing costs, a lack of new supply and an influx of Chinese buyers, Savills said. They have jumped more than 55 percent since the beginning of 2009, according to an index compiled by Centaline Property Agency Ltd., Hong Kong’s biggest closely held broker.

“Prices will continue to rise over the next year to 18 months,” said Simon Smith, the Hong Kong-based head of Asian real estate research, at a presentation in London yesterday.

In November, Hong Kong’s government stepped up a yearlong battle to curb inflation with additional taxes and policies. Chief Executive Donald Tsang pledged to make more land available to build 20,000 housing units each year and raised property taxes to deter speculators.

The Hang Seng Property Index, which tracks the performance of the city’s seven-biggest developers, gained 76 percent from the beginning of 2009, after falling to a more than four-year low during the global credit crisis.

Sun Hung Kai Properties Ltd., the world’s biggest developer by value and owner of Hong Kong’s two tallest skyscrapers, has gained 31 percent over the past year. Cheung Kong (Holdings) Ltd., controlled by Hong Kong’s richest man, Li Ka-shing, and the builder of luxury housing projects including The Legend, has risen 45 percent during the same period.

Hong Kong also leads at the top end of the market, London- based Savills said. A home in The Peak, an exclusive neighborhood with only 500 houses, might sell for as much as 6,353 pounds a square foot. That’s more than double the price for a comparable property in Mayfair or Knightsbridge in London, the second-most expensive city for high-end homes, the Savills survey showed.

Date: 28 January 2011 | For the full report, please visit http://www.bloomberg.com

Home Sales in Brooklyn, New York, Decline 30% After End of Tax Incentives

Home sales in New York’s Brooklyn borough dropped 30 percent in the fourth quarter after a federal tax credit propelled transactions to a record a year earlier.

The number of sales fell to 1,468 from 2,093 in the last three months of 2009, which was the largest deal volume for the quarter in eight years of record-keeping, New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today in a report.

“It does not mean that the housing market is souring,” Jonathan Miller, president of Miller Samuel, said in a telephone interview. “That decline was exaggerated because a year ago at this time, we had a surge in activity in all markets in the region from the tax credit.”

Demand is shifting toward larger homes after the tax credit spurred sales of starter properties, Miller said. The federal incentive, which provided the biggest benefit to first-time homebuyers, required deals to be completed by Sept. 30.

The median price of homes sold during the fourth quarter increased 6.2 percent from a year earlier to $475,000. The price bump reflects buyer interest in larger properties rather than appreciation in home values, Miller said. The report includes all condominiums, co-ops and one- to three-family homes that sold in the three months ended Dec. 31.

Corcoran Group, which also released a Brooklyn report today, said the median sale price of all homes and apartments in the borough fell 3 percent in the fourth quarter to $411,000. The median price of previously owned homes increased 9 percent from a year earlier to $371,000, the New York brokerage said.

Sales of apartments in new condo buildings accounted for 41 percent of all Brooklyn transactions in the fourth quarter, as developers of stalled projects were able to renegotiate construction loans, Frank Percesepe, Corcoran’s regional senior vice president for Brooklyn, said in an interview.

Brooklyn properties stayed on the market an average of 119 days, a 27 percent drop from a year earlier, when homes took an average of 163 days to sell, according to Miller Samuel and Prudential. Sellers pared an average of 5.6 percent off their original asking price to strike a deal in the quarter, compared with a 6 percent discount offered at the end of 2009.

Median prices for one- to three-family homes in northwest Brooklyn, including neighborhoods such as Park Slope and Carroll Gardens, fell 7.4 percent, to $995,000, according to Miller Samuel and Prudential. Sales there increased 30 percent from a year earlier, to 81 transactions.

Date: 21 January 2011 | For the full report, please visit http://www.bloomberg.com

Biggest Wall St bears buy Manhattan apts

Wall Street’s biggest bears are buying a piece of the Big Apple.

Nouriel Roubini and John R Taylor, better known as the ‘Dr Dooms’ of the financial industry, and John Paulson, the hedge fund manager who made massively successful bets on when the housing bubble would burst, are among the Wall Street crowd who have recently purchased New York City houses. It is perhaps the most positive sign for Manhattan property since the financial crisis hit in 2008.

‘I bought an apartment in Manhattan, which seems insane,’ Mr Taylor, who runs the world’s largest hedge fund at FX Concepts, told Reuters last month.

Mr Roubini, the New York University economist best known for predicting the world banking collapse and who warned in 2006 the ‘United States was likely to face a once-in-a-lifetime housing bust’, also bought a US$5.5 million condominium in Manhattan.

Mr Paulson purchased a condo on ritzy Fifth Avenue for US$2.85 million.

Mr Roubini and Mr Paulson declined to comment, but the deals were confirmed by public records, which showed they bought in the final two months of last year. Real estate agents for Manhattan’s elite say they have seen a surge in interest from the securities industry, which accounts for almost 35 per cent of all salaries and wages in the city, as it recovers from the meltdown following Lehman Brothers collapse in September 2008.

Multimillion-dollar holiday home sales in the Hamptons – the area of Long Island beaches known as Wall Street’s playground – have also started to pick up, they said.

New York City’s fortunes are closely tied to the financial industry. Everything from Manhattan real estate prices to high-end restaurants and private car services came under severe pressure in 2008 and 2009 when highly paid investment bankers and traders faced job losses and smaller bonuses.

‘Bonuses are supposed to be good and the stock market has perked up,’ said Michele Kleier, president of high-end real estate agency Gumley Haft Kleier. ‘It’s not 2007, but it’s so much better than in 2009.’

The bonus pool for 2010 performance is widely expected to top the 2009 payout of US$20.3 billion.

Many bankers and brokers earn a base salary of US$200,000 to US$500,000, and can at least double that with bonuses, which are typically paid out in January and February.

The biggest players on Wall Street, many of whom travel extensively in Europe and Asia, can also be forgiven for thinking that Manhattan apartments are at bargain basement prices compared with some of the big financial centres elsewhere.

A 3,000 square foot luxury apartment in London would cost on average around US$7.5 million, while in Hong Kong it could be US$5.1 million.

By comparison, a new New York apartment of that size would set you back US$4.5 million, according to a comparison which was conducted by Jones Lang LaSalle.

‘Wall Street is the main driver of the city’s economy, and also tends to drive the local real estate market,’ said Jason Bram, senior economist at the Federal Reserve Bank of New York. ‘High end may be picking up, in terms of volume, but that doesn’t necessarily mean that prices are going up, it just means there is more transacting.

Up until the Lehman bankruptcy, New York City seemed immune to the real estate woes plaguing the rest of the country.
But the demise of Lehman and the disappearance of Bear Stearns Cos and Merrill Lynch & Co through distressed sales transformed Wall Street.

The atmosphere on Wall Street has changed since. The potent combination of unconventional monetary easing by the Federal Reserve and stimulative fiscal policy from the US government has helped the banking system to heal.

Date: 20 January 2011 | For the full report, please visit http://www.businesstimes.com.sg